Telcos focusing on the ABCD of marketing

Telecom companies, including mobile phone makers and service providers, are targeting the 'ABCD' market. No, we are not talking about the American Born, Confused Desis here, rather the 'Ayah, Bai, Carpenter, Driver...' market.

This is not surprising as penetration in metros like Mumbai and Delhi has reached up to 40%. Having lopped off the creamy layer, operators are now forced to move down the value chain to attract new customers. The good news for telcos is that the ABCD market is going mobile with a vengeance as entry level costs have fallen for mobile handsets as well as mobile services.

Tariffs have been low in the fixed line segment too, as rates haven't been hiked from the Rs 1.2 per three minutes for years, but access to a mobile phone SIM card is relatively easier in many areas as these are available even at the local paan shops. Besides, this market has been ignored for long as communication was considered a 'luxury' amid doubts about the 'affordability' of mobile or landline communication. Also, telcos weren't interested in wiring up the ABCD users due to the low average revenues per user (ARPU).

But the success of schemes like the 'only incoming calls for a rental of Rs 100' and others that have low entry barriers proves that the ABCD market is just as eager to communicate as any other, provided the pricing is 'right.' Though call tariffs are low, the rental in the post-paid mobile products or the fixed monthly charges (described as access or administration charges) on pre-paid products are an entry barrier for the ABCD market.

Increasingly, telcos have been lowering the entry barriers by introducing tariff plans for as low as Rs 199 instead of the earlier minimum rate of Rs 300. Besides, they are also doing away with the fixed charges in low value products like the Rs 10-Rs 60 recharge vouchers which are akin to the satchets in the shampoo segment. The prepaid plans with recharge amount less than Rs 200 are targeted at first time users as well as people falling in the weaker economic strata.

Operators have been forced to change strategy due to the slowdown in growth in the metros and A class cities. But Naveen Chopra, corporate VP - group marketing, Hutch, points out, “The customers of low value prepaid plans are not restricted to B and C class cities alone. They are to be found in certain sections of the metros and A class cities also.”